US Motorists Road User Charge Taxes Create Windfall for Kiwi GPS Developers

The solution to a massive nose dive in US domestic tourism has come from an unlikely source, specialists in GPS vehicle tracking, Road User Charge rebate and electronic in-vehicle tax payments by Fleet Management companies in a place that many Americans couldn’t even place on a map, close to the bottom of the globe, New Zealand.

When the USA introduced national Pay As You Drive road user tax for all other than electric vehicles a few years ago, no one appreciated the impact this would have on a variety of industry segments. The intention was to encourage commuters and urban business travelers to make more use of public transport. Having a blanket rule resulted in a significant negative impact on the cost of living for rural Americans who typically have to travel much greater distances even for basic needs such as food, health, shopping an getting to work. It also decimated the domestic tourism industry.

Whilst rental vehicles were exempted which ensured international tourist numbers weren’t impacted, the tourism industry still  went into free-fall as domestic tourists couldn’t afford the increased cost to their trips. In the last few years US residents ‘for leisure’ person trips have dropped by a staggering 350,0000,000 from the 1.6 billion person trips recorded back in 2012.

Enter new rules designed to encourage people back onto the  freeways and into small town USA, which allowed rebates for motorists who met certain conditions. These included a ratio of distance traveled on non urban roads, or on private roads and proof that the vehicle was more than 100 miles away from home for one or more nights.

In Car RUC System

In Car RUC System

New Zealand Fleet Management solution companies, having had many years developing Road User Charge tax rebate solutions with GPS tracking for commercial diesel fleets, were able to offer a ready made answer. Not only did they have low cost solutions ready to plug in to most vehicles manufactured since 2007, they also had the ability for people to pay those taxes direct from the vehicle and included an in-vehicle display which both Police and the public could use to ensure that taxes had in fact been paid. Several Kiwi companies have now partnered with US organizations including domestic Fleet Management companies and major vehicle brands.

The AAA and insurance companies also welcomed the move as the Fleet Management systems monitor car driving behavior, encouraging green driving and enabling PAYD (Pay As You Drive) insurance, where premiums are reduced for people who don’t use harsh breaking, over-acceleration and other behaviors which reduce risk. Several car and motor-home manufacturers are now considering putting this technology into their vehicles as standard features.

According to US Travel Association research in 2012, 1 out of 8 US jobs depended on travel and tourism (representing 14.6 million jobs supported by travel expenditures), which was in the top 10 income earners for 48 states.

It is hoped that domestic tourism will make a big swing back in the coming year, with the costs of the initial investment for motorists being offset by a variety of discounts, special tourism industry offers and off course road user tax rebates for those who meet the criteria.

Production of New Zealand Bank Notes Continues Decline

Cash

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Remember cash? Do you still carry any? In the last few years with eMoney it has almost become non existent. New Zealand was one of the first countries to adopt EFTPOS as a way to reduce the risks and costs around cash management many yeas ago.

With so many people buying everything from groceries to electronics online or on finance, cash has become almost a thing of the past and something Kiwi travellers now find quite novel when we travel overseas.

It has been very interesting for the Government to deal with because in many cases where goods are purchased from overseas, they miss the opportunity to charge GST or other duties when parcels come from overseas in the mail.

New forms of virtual money have appeared and companies like Google, Facebook and Zynga have started creating their own value systems and many new barter organisations have appeared, while the old vanguards such as Bartercard are growing in popularity.

The old system of cash jobs, the grey market is probably the main area still propping up physical currency at all because even money transferred via eWallets through intermediaries such as the Telcos  is still auditable. Out of interest, New Zealand hasn’t minted 5 cent coins since 2004, 20 cent coins since 2008 and the number of bank notes produced has been in decline at a rate of over 10% p.a. since 2010 even though our population has grown dramatically with increased immigration.

It is expected that within another 20 years bank notes and coins will become collectors items and future generations will look at them as an interesting historic item and wonder why anyone ever bothered with them.